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Questioning the Re-Sale Value of Hybrids

I am thinking of buying a hybrid for the first time (either Honda or Toyota). The salesmen all tout "re-sale value" but this seems illogical. Even after disregarding the maintenance problems noted by previous writers about the Accord Hybrid, it seems logical that after five years a hybrid will sell at a discount to a regular vehicle by the cost of a new battery (which could be quite expensive to get a compatible battery at that time). And since you pay a premium to buy a new hybrid in the first place, the annual depreciation on a hybrid has to be more than for a conventional car. And who wants to pay several thousand dollars to get his five year old car up to a saleable condition by putting in a new battery system? Is my reasoning faulty?

I don't recommend buying any car based solely on its resale value. However, hybrids are a new concept and neither the re-sale market nor the battery replacement market have leveled out yet. Therefore, all you can go on is guesses based upon knowledge of the situation.
As far as I know, very few people have had to replace hybrid batteries. As with most auto parts, the prices are expensive if bought from the factory directly. If battery replacement becomes an issue, I think you can be sure that after-market replacements will show up quickly, similiar to how transmissions, tires, batteries, etc for conventional gasoline cars.
Also, remember that battery technology is improving and coming down in cost. By the time you need to replace the battery (~150K miles), the price should be lower and the quality better.
Keeping in mind that 150K mile point: I just sold a '95 Saturn with 160K miles on it. It leaked oil and had many risks that exceeded any risk of an old battery.
My recommendation is that if you want a hybrid, get a hybrid. I'd lean away from the Accord Hybrid since it has a lot of unnecessary complications in the Internal Combustion Engine (ICE) that are likely to go bad long before the battery shows any signs of weakening. I'm sure that the HCH, Prius, Camry, FEH, and HiHy will all work just fine and likely have reasonable resale.

Questioning the Resale Value of the Hybrid

While I agree with ex-EV-1 that one should never use resale value as the sole reason for buying a hybrid, it should be an important consideration. The basic pro and con decision is to weigh fuel economy and environmental impact against cost of investment. Many potential buyers are only considering the cost of purchase and not focusing on depreciation, and I think this is a mistake. (I was just offerred by a Honda dealer a pristine Certified 2005 Accord fully loaded with leather and Navigation system and only 22K miles for $21.5 thousand. That is over 30% below its original price and essentially the same price as the similarly equipped non-hybrid Accord EX-L. Consequently, the car lost its entire hybrid premium in less than 2 years. And if that is what the dealer was selling it for, imagine what the original owner lost on his resale!)

I really do think that as a car passes its five year mark, it will sell at a discount at least equal to a new battery system. And I don't necessarily agree that the cost of such a system will go down significantly. Due to the rapidly changing technology, the availability of a compatible battery system in five years may be limited - after all, these systems are not as interchangeable as tires or conventional batteries. Early adopters enjoy a period of being "cool", but at least the Betamax wasn't that expensive. I think I'll wait for some more price reduction.

Who Does Not Care About Re-sale Value? Rich People?

Not many people can afford to buy new hybrid cars. These are premium prices to start. The hybrid vehicle is for the upper 5% who can afford to drop $30,000 plus on new vehicle. What of the rest of the 95% of the population. Hybrid owners normally have a 2nd car as well - BMW SUV, Jeep, etc. Many hybrid owners simply use the vehicle for the carpool lane commute. The result of a hybrid car in the car-pool lane is that a Suburban with four passengers is more efficient and creating less traffic. For the rich the hybrid is a way to buy into the car-pool lane and ease their minds for their instant green lifestyle.

Not only is resale value a concern for the other 95% of Americans - new clean Diesel technology is about to be launched. GM, VW, etc. The vehicles made for the masses who have budgets. This new diesel technology will provide sedans with 45 plus MPG highway! In addition the dual mode hybrids will be out shortly - providing both city and highway fuel efficiency.

We are still early in the adaption stage - those who must have the latest, those who want the car-pool lane, and those born again environmentalist who use it to attack or judge others.

Thrifty people buy hybrids too

Hello,

I am not wealthy but I bought a Highlander Hybrid last year. I tend to keep my cars a long time til they either get wrecked or just won't run anymore.
I think a lot of people compare hybrids to other cars. Example: comparing a Highlander Hybrid to a Chevy Aveo. You need to compare the hybrid to the non-hybrid model of the same car. I bought a Highlander because it is the perfect size car for my needs. I paid extra for the hybrid option because I see the hybrid option as gasoline insurance.

My hybrid Highlander gets about 10MPG better than a similar non hybrid Highlander. Right now gas in my area is almost $3.00 a gallon. Five years from now there is no telling what we'll be paying for gas. I am very confident that five years from now my Highlander will still be going strong and I'll still be getting 10MPG better than if I bought a non-hybrid Hiighlander.

Since I keep my cars a long time I think the hybrid option was a wise choice because resale value means very little to me. I have heard of Prius cars running fine with 200,000 miles. I hope to get the same with my Highlander.
I'd love to know if there's a place in this forum where high mileage hybrid owners post and let others know how they're doing.

2006 Honda Civic Hybrid with stickers

I bought the Civic Hybrid for two reasons: EPA estimate of up to 50 MPG, and the CA carpool stickers for my 70-80 mile r/t commute. Now I only commute 3 days a week, and hope to retire in a year or two. I've heard that the resale of stickered hybrids is much higher than stickerless ones. Anyone know how much more they draw?

Ah but what KBB says and

Ah but what KBB says and what you can find in real life can be way different. The resale on our 2003 HCH was $14,500 but we just drove it off the lot for $10,200. Why? Because the hybrid technology is fairly new and since the car had only 2000 miles to go until it's 8 year/ 80,000 mile warranty ran out. I think that freaks people out. I did a carfax check and it turned out to be a one owner CARFAX certified VIN number that had had regular maintenance at Honda dealerships so we didn't hesitate to buy it. It was actually $2000 - $4000 cheaper than a regular Civic of the same year and mileage. We wanted the Hybrid because my wife drives her car for work and wanted to lessen her "carbon footprint" and lessen her guilt to the environment as well. I can't blame her.

There is a person here in Seattle that can't give his HCH away because it has 165K miles on it. He's been trying to sell it on craigslist now for a month at $8600 and no bites. If it was a regular civic he would probably be asking $2000 or $3000 more. But I have to say that the Prius has really held it's resale value. We couldn't find one under $13000 no matter the year or mileage.

We have never been people that have to have a new car. I honestly believe buying new is a bad investment strategy. It seems that Hybrids are falling into the luxury car category of falling like a rock resale hit they take in the first couple of years. I pay cash for all of our cars. But I also shop around for cars that have a good history as well and it's treated us right. So far so good on the HCH! All the research I've done on this car says it is very reliable. The only unknown is how many miles or years will it go before the battery wears out.

On another related topic I am already seeing used HCH battery packs on EBAY for less than $1000 and I would not hesitate to buy one if our battery ever wears out. Why put $8000 into a car that is only worth that much? It's just a 144v NiMh Battery! There really isn't much to go wrong with them accept wearing out and not holding a charge.

Hello,
I just was curious as

Hello,

I just was curious as to where in the country are you located? I sell Toyota's in MA. and can sell a prius brand new with limited options for around $21,990.00 The one people normally purchase is with some extras and runs $23,790.00 It's a shame they are not that in-expensive everywhere in the country, but I must agree $30K is a bit rediculous considering all the other company's building hybrids are leasing Toyota Hybrid Technology to do it. Toyota's advantage is they are in tier two already, and everyone else is being left to lease tier one from them because Toyota saw the way things were going to be down the road and made the leap in the early 90's to begin to spend millions on R & D for the Hybrid Technology that they created.

I must however disagree on economy in a Prius vs. Suburban with 4 people in it in the carpool lane. The prius gets 46-48 MPG+ in the city, and 45-47 MPG+ on the highway. This economy may be some what reduced by increased vehicle options, and added passenger weight. However not so much as in a Chevy Suburban with 4 people riding in it. I read on the consumer reports website that over 80% of the prius buyer's that have been surveyed, have stated they will buy another one.

As for resale value I cannot speak for other brands but Toyota's always hold there value. Try looking up the KBB on two used cars putting over 100,000 miles on each, and make them competive models like say a Ford Taurus Vs. a Toyota Camry. I did this with these two vehicles myself and then tried others, and was amzed at how the Toyota's were worth so much more. On the Taurus Vs. Camry comparison the Taurus was worht $995.00 trade in value and the Camry was worth $2,500.00+ I used model year 2000 for both of them and gave them the same options.

I never sold cars for a living in my life until 3 months ago, but when I made the decision to give it a try I decided to sell a product I could believe in. After learning all I know I will never buy any other brand again because Toyota has proven to me they care about 3 things when it comes to cars.

# 1. They care about passenger safety.
# 2. They care about reliability.
# 3. They care about Resale value.

and their actions prove it in what they spend their profits on, which is developing more vehicles to meet everyone's needs and leaving them always wanting to buy another one. Other car company's make people think they are giving you a great deal when they sell you a vehicle because of a $5,000.00 or more rebate but what does that do to the guy who bought his a week ago when they were not offering that same deal and what does that do to all of their vehicle... it kills their value and depreciates them so fast they hold no resale value, and when you are done putting your hard earned money into them at the end of the loan they are worth much less than what you have put into them.

To me that's foul because they are shafting the consumer, and helping them to need a new vehcile much faster than they should if they wanted to keep driving it inexpensively they often cannot. However even if you are a person who likes a new vehicle when you are done paying for your current one you must admit it would be great to have it be worth a whole lot more, rather than worth-less...